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Relationships V Performance (suitability)

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Jul 30, 2008 11:08 pm
snaggletooth:

Someone please get a hold of this guy’s parents before he does something to lose them more of their inheritance.

    Emoticons are sooo gay, but that's a different thread.
Jul 30, 2008 11:19 pm

Buildingwealth: you are not listening.  You don’t know and we can’t know if your Grandmother’s investments are inappropriate because we don’t have enough information and neither do you.

  1. What is her entire investment portfolio...not just the stuff on this statement.     Does she have CDs Annuities, Bank Accounts, Real Estate.   2. What is her overall net worth?  Compared to the amount invested in this portfolio.   3. When did she invest and what was her initial investment in this investment.  10 years ago.  Last week.   4. What sources of income does she have?  Is she relying on income from this portfolio?   5. What was the source of her initial investment?   6. What percentage of her ENTIRE portfolio does this inappropriate investment represent.   7. What is the overall gain/loss in her entire portfolio and not just in this investment.  Maybe she is down in this current moment from her account highs but still might be in positive territory.  Maybe not. We don't know and neither do you.   8. Can she take advantage of a capital loss against capital gains. Maybe she should cut her losses and take a tax break.  Does she need a tax break   9. You mentioned she is in long term care. Does she have a LTC policy.  How is she paying for her care?   There is a lot to be considered.....not just OMG!!!! Small Cap Fund Old PERSON !!!!!   It may well be that it is inappropriate, but if you are going to be an advisor looking after OPM (other people's money) you need to be clear headed and analytical.  This is why we don't recommend that you handle your own family as clients.  It is too difficult to keep a clear head when you are involved on a personal level.
Jul 30, 2008 11:22 pm

Really, just trying to be helpful

  Gay emoticons
Jul 30, 2008 11:26 pm

[quote=babbling looney]Really, just trying to be helpful

  Gay emoticons [/quote]   I know you've already been asked to have someone else's baby, but can we just practice?
Jul 30, 2008 11:31 pm

[quote=Primo][quote=babbling looney]Really, just trying to be helpful

  Gay emoticons [/quote]   I know you've already been asked to have someone else's baby, but can we just practice? [/quote]   Hell, yeah!  That's way better than actually having a baby.   Of course I will need to get permission from my husband.  I sorta think he will say nope. 
Jul 30, 2008 11:40 pm

Not if you tell him that you are just practicing so you can make him happier!!!  That will convince him.

Jul 30, 2008 11:45 pm

[quote=babbling looney]To be more specific my grandma has lost over 20% of her net worth just this last month or two, the 7K was just very recent

  Ahem....have you taken a look at the markets in the last couple of quarters????   [/quote] Babs, with all due respect, and i mean that, your posts are always constructive and relevant so no disespect meant - As Ice said, there is a lot of info we dont have, that we would need to make the right decisions if this where our client. But if a client is down 20% this past month or two, (if thats really the case), then it means the client in all likelyhood has pretty much 100% exposure to equities or equity like stuff. And it doesnt really seem appropriate for a 91 year old to be in that position. Unless of course, this is money that she knows sshe will never ever have to touch and wants it to grow for her heirs. JMHO
Jul 31, 2008 3:27 am
Primo:

Not if you tell him that you are just practicing so you can make him happier!!!  That will convince him.

  Well, practice does make perfect.   Pratoman:  I we don't know if she is down 20% all together or just 20% in that particular "inappropriate fund".  Pretty much, I take all of the information given from my actual clients at  60 to 70%  on the truthfullness scale.  On the internet, a whole lot less.    So if our original poster was telling us the complete unvarnished truth ...I'd be damned surprised.  The point is that our newbie broker is trying to second guess a long term advisor based on a statement presented by his 91 yr old Grandmother.  Is our newbie just the teensiest bit involved and emotional?   Ummmm ...yeah.  Should he get a second opinion considering that he still has egg shells on top of his newly hatched head.  F*ck yes.
Jul 31, 2008 10:48 am

But if a client is down 20% this past month or two, (if thats really the case), then it means the client in all likelyhood has pretty much 100% exposure to equities or equity like stuff. And it doesnt really seem appropriate for a 91 year old to be in that position.

  You might be correct, but I wouldn't make that assumption that it isn't appropriate without way more facts.  We're talking about an unhealthy 91 year old.    This isn't a portfolio that has to survive 30 years.  Her life expectancy is probably closer to 2-3 years.   Losing money isn't a big issue.  Running out of money is a big issue.      I find that most old people have two financial goals.  1) Live comfortably for the rest of their life.  2) Leave as much money behind as possible at death.  Goal #1 comes first.  Are these her goals?  If so, will the portfolio allow her to do this?   Also keep in mind that even if it isn't the best portfolio, and this is non-qualified money, making changes may not make sense if it will create taxes.  She may have big unrealized gains.  By selling now, she'll bear the cost of these taxes.  If the fund(s) aren't sold, they'll get a step-up in basis at death thus possibly saving significantly on taxes.